NISSAN MOTOR Co, LTD. v. NISSAN COMPUTER CORP.
Nissan Motor Co, Ltd. Vs Nissan Computer Corp
United States District Court – Central District of California
Case No. CV 99-12980 DDP (Mcx)
Decision of March 23, 2000
89 F. Supp. 2d 1154
The defendant’s motion to dismiss and the plaintiffs’ motion for a preliminary injunction came before the Court for oral argument on March 13, 2000. After reviewing and considering the materials submitted by the parties and hearing oral argument, the Court adopts the following order.
I. Background
Plaintiff Nissan Motor Co., Ltd., is a large Japanese automaker. Its subsidiary, plaintiff Nissan North America, Inc.,
markets and distributes Nissan vehicles in the United States. Nissan Motor Co. owns, and Nissan North America is the exclusive licensee of, various registered trademarks using the word “Nissan” in connection with automobiles and other vehicles. (Rinek Decl. 4-5.) The first such trademark was registered in 1959. (Id.) Nissan North America also operates an Internet website at “www.nissan-usa.com.”
The defendant, Nissan Computer Corporation, is a North Carolina company in the business of computer sales and services. The company was incorporated in 1991 by Uzi Nissan, its current president. (Nissan Decl. re: Prelim. Inj. 6.) Mr. Nissan has used his surname in connection with various businesses since 1980. (Id. 2-3.) Nissan is also a term in the Hebrew and Arabic languages. (Id. 2 & Ex. 38.) In 1995, the defendant registered a trademark for its Nissan Computer logo with the state of North Carolina. (Id. Ex. 45.)
The defendant registered the Internet domain names “nissan.com” and “nissan.net” in May 1994 and March 1996, respectively. (Compl. Exs. B, C.) For the next several years, the defendant operated websites at these addresses providing computer-related information and services. In July 1995, the plaintiffs sent the defendant a letter expressing “great concern” about use of the word Nissan in the defendant’s domain name. (Nissan Decl. re: Prelim. Inj. 15 & Ex. 44.)
In August 1999, the defendant altered the content of its “nissan.com” website. (Davis Decl. Ex. E.) The website was captioned “nissan.com,” and displayed a “Nissan Computer” logo that is allegedly confusingly similar to the plaintiffs’ “Nissan” logo. (Id. Exs. E, G.) In addition, the website displayed banner advertisements and web links to various Internet search engines and merchandising companies. (Id. Ex. E.) These advertisements included links to automobile merchandisers, such as “cartrackers.com” and “1StopAuto.com;” links to auto-related portions of search engines; and links to topics such as “Car Quotes,” “Auto Racing,” and “Off Road.” (Id. Ex. E; Schindler Decl. re: Prelim. Inj. Ex. E.)
In October 1999, the parties met to discuss the possible transfer of the nissan.com domain name. (Nissan Decl. re: Mot. Dism. 9-10; Davis Decl. 11-12.) In the course of these discussions, Mr. Nissan admittedly stated that he would not sell the domain name except for several million dollars, and made a proposal involving monthly payments in perpetuity. (Davis Decl. 11; Def.’s Opp’n re: Prelim. Inj. at 9-10.) Negotiations were unsuccessful.
On December 10, 1999, the plaintiffs filed a complaint in this Court alleging: (1) trademark dilution in violation of federal and state law; (2) trademark infringement; (3) domain name piracy; (4) false designation of origin; and (5) state law unfair competition. Also on December 10, the Court denied the plaintiffs’ request for a temporary restraining order and scheduled the matter for a preliminary injunction hearing. The Court also approved limited expedited reciprocal discovery.
The plaintiffs’ motion for a preliminary injunction came before the Court for oral argument on February 7, 2000. The plaintiffs seek an order, inter alia, enjoining the defendant from displaying advertisements and links on its websites and requiring the defendant to display a disclaimer and link to the plaintiffs’ website. Alternatively, the plaintiffs seek an order restraining the defendant from using the nissan.com and nissan.net websites pending resolution of this action.
The defendant now moves to dismiss for lack of personal jurisdiction or, in the alternative, for improper venue. The Court deferred ruling on the preliminary injunction pending settlement discussions and briefing on the defendant’s motion.
II. Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction
A. Legal Standard
A federal court’s exercise of personal jurisdiction must comport both with the long-arm statute of the state in which it sits and with the constitutional requirement of due process. California’s long-arm statute is coextensive with due process requirements. See Cal. Civ. Proc. Code § 410.10; Data Disc, Inc. v. Systems Tech. Assocs., Inc., 557 F.2d 1280, 1286 (9th Cir. 1977). Due process requires that the nonresident defendant have “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal citation omitted).
As discussed further below, a federal court may exercise either general or specific personal jurisdiction. The plaintiff bears the burden of establishing the necessary jurisdictional facts. See Flynt Distrib. Co., Inc. v. Harvey, 734 F.2d 1389, 1392 (9th Cir. 1984). To survive a motion to dismiss for lack of personal jurisdiction, however, the plaintiff need only make a prima facie showing of jurisdiction. See Ziegler v. Indian River County, 64 F.3d 470, 473 (9th Cir. 1995). In determining whether the plaintiff has met this burden, the Court must take the allegations in the plaintiff’s complaint as true and resolve disputed jurisdictional facts in the plaintiff’s favor. See AT&T Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588-89 (9th Cir. 1996).
B. General Personal Jurisdiction
General personal jurisdiction may be exercised as to any cause of action, if the defendant is domiciled in the forum state or if its activities there are “substantial” or “continuous and systematic.” Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 (1984).
In this case, the plaintiffs do not argue that the Court has general personal jurisdiction over the defendant. (Opp’n at 12 n.5.) Moreover, there is no evidence that the defendant has “substantial” or “continuous and systematic” contacts with California. The defendant has offices and employees only in North Carolina, offers only local Internet access, and apparently limits its sales and advertising to the East Coast. (Nissan Decl. re: Mot. Dism. 4-5.) Accordingly, the Court finds that the plaintiffs have not established a basis for general personal jurisdiction over the defendant.
C. Specific Personal Jurisdiction
Specific personal jurisdiction may be exercised when the “nature and quality” of the defendant’s contacts with the forum state are significant in relation to the specific cause of action. Data Disc, 557 F.2d at 1287. Specific jurisdiction requires a showing that: (1) the nonresident defendant purposefully directed its activities toward the forum state; (2) the plaintiff’s claim arises out of or results from the defendant’s forum-related activities; and (3) the forum’s exercise of personal jurisdiction is reasonable. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477-78 (1985); Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987).
1. Purposeful availment
To establish purposeful availment, the plaintiffs must show that the defendant has deliberately engaged in “significant activities” within a state or has created “continuing obligations” between himself and the forum. See Gray & Co. v. Firstenberg Mach. Co., 913 F.2d 758, 760 (9th Cir. 1990) (quoting Burger King, 471 U.S. at 475-76). In the Internet context, alleged trademark infringement in connection with the domain name of a passive website does not itself subject the defendant to personal jurisdiction in the plaintiff’s forum state. See Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 419 (9th Cir. 1997). Rather, there must be “’something more’ to indicate that the defendant purposefully (albeit electronically) directed his activity in a substantial way to the forum state.” See id. at 418.
A. Transaction of Business
The plaintiffs contend that the defendant’s transaction of business in California establishes purposeful availment. The general rule is that merely contracting with a resident of the forum state is insufficient to confer specific jurisdiction over a nonresident defendant. See Burger King, 471 U.S. at 479; Ziegler, 64 F.3d at 473. However, solicitation of business in the forum state may constitute purposeful availment “if that solicitation results in contract negotiations or the transaction of business.” Shute v. Carnival Cruise Lines, 897 F.2d 377, 381 (9th Cir. 1990), rev’d on other grounds, 499 U.S. 585 (1991).
The plaintiffs submit evidence that the defendant contracted with five companies based in California: Asimba, Inc.; Ask Jeeves, Inc.; CNET, Inc.; GoTo.com, Inc.; and RemarQ Communities, Inc. (Schindler Decl. re: Mot. Dism. Exs. 1-5.) The defendant displayed advertising banners and links from these companies on the nissan.com website, and received a commission each time a visitor clicked through to an advertiser’s website. According to the plaintiffs, more than 90,000 customers clicked through from the nissan.com website to the websites of the California advertisers between August and December 1999. (Id. 19.) In addition, the plaintiffs submit evidence that the defendant directly solicited auto-related advertising business from another California-based company, Autoweb.com, although this solicitation did not result in the transaction of business. (Id. Exs. 15-16.)
The defendant responds that it arranged the advertising on its website through a Massachusetts-based intermediary, Be Free, and that it never knowingly reached out to California companies. The Court rejects this argument. The plaintiffs submit evidence that the defendant contracted directly with the five California-based advertisers. Specifically, by enrolling with advertisers on Be Free’s website, the defendant agreed to be bound by contracts with those advertisers. (Schindler Decl. re: Mot. Dism. Exs. 6-12; Greenstein Decl. in Reply to Mot. Dism., Ex. 85 at 21.) In each case, the defendant also received e-mail acceptance notices directly from the California advertisers. (Id. Exs. 18-24.) Finally, the plaintiffs submit evidence that each of the defendant’s contracts with the California advertisers provided that the contract would be governed by California law. (Id. Exs. 8-12.) This factor alone is sufficient to establish purposeful availment. See Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 840 (9th Cir. 1986).
The Court finds that the defendant purposefully directed its activity in a substantial way toward California. Accordingly, the plaintiffs have met their burden to show purposeful availment.
B.Effects Doctrine
